With key decisions on gas price hike revision and new bank permits left hanging, Finance Minister P. Chidambaram on Monday said the Petroleum Ministry as well as the Reserve Bank of India (RBI) have been over cautious in seeking approval from the Election Commission.

P. Chidambaram's comments come at a time when any new proposal by the UPA will have to be first cleared by the poll panel to ensure that it does not violate the Model Code of Conduct, which is in effect for the upcoming General Elections.

Chidambaram stressed that the government has no role to play in the process of granting new bank permits. “RBI governor Raghuram Rajan has made it clear that he referred the decision to the Election Commission out of abundant caution,” he said responding to another query.

Stressing that the process of granting bank licenses should not be interrupted, the finance minister said that its interruption would send a signal to the world that the government has a role to play in the grant of these permits.

The Election Commission was set to meet on Monday to decide on the big ticket proposal but its meeting was postponed dashing expectations of any announcement on new bank permits in the RBI's monetary policy statement on Tuesday.

Meanwhile, responding to a query on the postponement of the gas price hike, Chidambaram said, “There was no obligation of the ministry of petroleum and natural gas to send it to the Election Commission. The decision by the Cabinet was taken some two to three months ago. I think they did it out of abundant caution.”

Defending the Cabinet decision, he further said, “The Cabinet decision is the right decision and I will defend it. Today, we are importing one unit of gas at a much higher price.”

Based on the Rangarajan formula, the Cabinet Committee on Economic Affairs had in June 2013 approved an increase in gas prices from April 1, 2014, which was notified in January this year. But the Election Commission has ordered its deferment on the grounds that it should be the decision of the new government formed after the General Elections.